Sam Laidlaw will be quizzed on Tuesday over the precise nature of the
“inaccurate reports” to ministers he identified in his investigation into
the West Coast rail bid fiasco.

The Centrica chief executive appears before MPs on the Transport Committee, who are keen to get to the bottom of issues he appeared to gloss over in his 84-page report.

A key issue is exactly what civil servants attending the June 27 Contracts Awards Committee (CAC) told their superiors, and ultimately former rail minister Theresa Villiers, over how they determined the size of the subordinated loan facility (SLF) put forward by bidders.

This is the amount the Department for Transport (DfT) required bidders to pledge against the risk of them walking out on the contract for the London-to-Scotland line. FirstGroup, which had been awarded the contract before Transport Secretary Patrick McLoughlin pulled the competiton on October 3, had pledged £190m. Incumbent operator Virgin Rail had offered a £40m SLF against a lower and less risky bid.

Mr Laidlaw’s report found that, contrary to the rules of the competition, an in-house lawyer had told the CAC that “it was open to the DfT to exercise discretion in sizing the SLF requirements”.

However, following the committee meeting, Annie Harris, a partner from the DfT’s external legal adviser Eversheds, warned that the DfT’s use of discretion may have been “inconsistent” with the rules of the competition.

Mr Laidlaw pointed out that “there were a number of opportunities for a full and proper explanation as to how the SLF requirements had been sized to be formally escalated and reported within the DfT in the seven weeks after the CAC meeting and before the award announcement was made on 15 August 2012. These opportunities appear not to have been taken.”

He added that “inaccurate reports as to how the SLF numbers had been produced by the DfT were made to senior DfT decision makers and ultimately to the then Minister of State” – Ms Villiers, who has since been promoted to Northern Ireland Secretary.

Mr Laidlaw added: “The material on which these senior DfT decision makers and the Minister made their decisions to award the ICWC [Inter City West Coast] franchise to First included these inaccurate reports.”

Asked to explain the nature of these reports – and whether they were verbal or written – a spokesman for Mr Laidlaw declined to comment.

There is speculation that one such report is the minute of the CAC meeting. Mr Laidlaw’s report found that “unhelpfully” the “short draft minutes of the [CAC] meeting... were replaced with even shorter final minutes”.

The meeting was chaired by Kate Mingay, the DfT’s director of commercial and technical services, who was suspended the moment the West Coast auction was pulled. After a court fight, she is now returning to work.

Louise Ellman, chairman of the Transport Committee, said the “inaccurate reports” referenced by Mr Laidlaw were “certainly an area we will be looking at”.

Immediately after Mr Laidlaw’s report was published earlier this month, Ms Ellman noted it “raised serious issues about lines of responsibility and accountability within the department”, with the result that ministers could have been “misled” by officials.